Promotions into Management?

[Duds13]

I wouldn't say this is a big problem for me. We are not a huge company but not a small one either, over $250MM in sales last year. Our teams are accustomed to a few hiccups along the way. Not that finger pointing never happens though...

The way I have handled it is by having built a culture of help and communication. Way too deep for a short post... But, mostly my guiding vision is to help and support our internal "customers" the best way we can, providing solutions not just answers or parts. Often that means stepping out of a traditional purchasing mindset and becoming almost a one stop shop to provide solutions for any issues of the departments that rely on the procurement department. It may mean putting on a production engineer's hat to make small changes to packaging for easier or faster throughput on an assembly line. Or it could be helping a vendor organize their production by prioritizing our orders with said vendor if they are running behind. I might get that priority list by gathering the CS team, sales, and field service together to set expectations. That meeting may allow me to get a true picture of what projects can actually install, what external customers are needing the product the quickest, etc. I also like to anticipate needs or intuit how sales is going to use the information they get from our team so we can provide that information in the best way possible for them. We often work harder in procurement to save sales, service, and production work or time on their part. I'm also accepting of blame if our team makes a mistake, and don't make a big deal of another department's mistakes. Just fix the problem and move on.

As for inventory, that is very much business by business. Some want very little inventory on hand and run on a "Just In Time" system. Others want the warehouse full and have a 5 year inventory turn. Here it's dependent on vendor, product, and lead time as to how much to keep on hand. You are never going to be perfect with a forecast.

Good stuff and awesome way to handle things.

The main issue with my current company is we are basically 80-90% project based. I'm dealing with some 16-20 week lead times but the company has built a culture of saying "Yes we can meet your 8 week deadline" knowing full well we don't have enough parts on hand to build their order. I'm not allowed to start procuring parts until we receive a PO from the customer, which makes sense because a lot of components are custom so if I ordered them and they ship to us then customer cancels the order, we're screwed.

 

[LittleBittyBigJohn]

That's a tough one. A lot of factors to consider, and could depend on how custom. You also can't control what sales does out in the field, you just have to understand the game and try to solve the issue as best you can.

We do lots of custom stuff and work with vendors so they have product on hand for our more common customs, if we aren't ordering ahead. If it's long lead time raw materials that the product is made from, we may have the vendor keep some quantity on hand specifically for us. There are a few things that we have a min/max established and a minimum committed volume so the vendor can run a longer production run knowing we will purchase the product as orders come in. We will buy any overstock up to the agreed upon limit if a certain time line has passed.

We treat most of our vendors as partners. We show loyalty and expect it in return. We work together with them to solve problems. Most vendors will work with you to help you find a solution to the issues you are having. They want to sell you their gizmo as bad as you want to sell the project that uses their gizmo to your customer.

Those types of decisions and solutions are what separate purchasing from procurement. Purchasing is go buy the thing from the place. Procurement is, I need this thing with the right quality, at the right time, at the right price. Now figure out the best way to make that happen.